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- FHFA will also require that at least 50 percent of the Enterprises' multifamily business be mission-driven affordable housing.
The 2022 caps are an $8 billion, or 11.4%, increase from $70 billion for each Enterprise this year, and are based on FHFA's projections of the overall growth of the multifamily originations market, the agency said.
To ensure a strong focus on affordable housing and traditionally underserved markets, FHFA said, it will require that at least 50 percent of the Enterprises' multifamily business be mission-driven affordable housing. FHFA also will require at least 25 percent of the Enterprises' multifamily business be affordable to residents at or below 60 percent of area median income, up from 20 percent in 2021.
"The increases of the multifamily loan purchase caps and higher mission-driven business requirements assure that the Enterprises' multifamily businesses have a strong and growing commitment to affordable housing finance, particularly for residents and communities that are the most difficult to serve," said FHFA Acting Director Sandra L. Thompson.
In addition, FHFA said it has changed certain definitions of multifamily mission-driven affordable housing in Appendix A of the Conservatorship Scorecard. In 2022, FHFA will allow loans on affordable units in cost-burdened renter markets and loans to finance energy or water efficiency improvements with units affordable at or below 60 percent of AMI to be classified as mission-driven.
To ensure the Enterprises continue to provide sufficient liquidity and support in the multifamily mortgage market, FHFA said it will continue to monitor impacts of COVID-19 on the multifamily mortgage market and will update the multifamily caps and mission-driven requirements if adjustments are warranted. However, to prevent market disruption, FHFA said that if it determines that the actual size of the 2022 market is smaller than was initially projected, it will not reduce the caps.
“FHFA's increase to Fannie Mae’s 2022 multifamily loan purchase cap will continue to strengthen our ability to provide liquidity and stability in the multifamily mortgage market and recognizes our more than 30-year history as a reliable source of multifamily mortgage capital,” said Michele Evans, executive vice president and head of multifamily at Fannie Mae. “In addition, FHFA’s focus on mission-driven, affordable multifamily housing echoes Fannie Mae’s commitment to preserving and expanding the affordable housing supply, as well as financing quality green and sustainable rental units, across the United States.”
Debby Jenkins, executive vice president and head of Multifamily for Freddie Mac, also issued a statement on FHFA's announcement.
“FHFA’s enhancements to our mission focus and 2022 volume cap increase will allow Freddie Mac to better support the multifamily market in the year to come," she said. "These changes allow us to provide more liquidity to the growing market and delve deeper into our mission to address the nationwide housing affordability crisis.”